What Happens When Everyone Wants Out?
Apply reserve losses and repeated redemptions to see how coverage, supply, stale prices, and exit capacity expose the worst boundary.
- Trace how reserve loss changes coverage
- Explain the difference between ordinary redemption and a run
- Understand how wrong prices and thin reserves compound
- PREVIOUSWhat Is an Arbitrageur Repairing During a Depeg?
- CURRENTWhat Happens When Everyone Wants Out?
Apply reserve losses and repeated redemptions to see how coverage, supply, stale prices, and exit capacity expose the worst boundary.
- NEXTFree sandbox
Think about these questions first.
Choose an answer before opening the explanation. You can add anything unexpected to your review list.
Q01Why do early redeemers benefit when reserves are short?＋
If the system pays $1 first-come-first-served, early users take full value and leave the shortfall to remaining holders. That ordering advantage encourages everyone to run sooner.
The hardest moment for a stability promise is not when nobody trades; it is when everyone wants out at once. Supply alone hides reserve losses, stale prices, and redemption order. Put them on one state ledger.
Reserves, supply, and exit pressure
Once a system has issued 500 USD-LAB, it must keep answering:
- What are reserves worth at the current price?
- How much liability does the stablecoin supply represent?
- After some holders redeem first, how much reserve still covers the remaining supply?
- Is the price input current, or already stale?
COLLATERAL → USD-LAB
Put a one-dollar target stablecoin into a state machine and watch minting, price, redemption, and reserves define the stability boundary.
Apply reserve loss and redeem repeatedly to expose coverage and remaining reserves.
- Wallet collateral
- 1,000
- Your USD-LAB
- 0
- Lost reserves
- 0
- Total redeemed
- 0
Supply is a protocol promise; reserves are the assets actually available at exit. Keep both on the same ledger.
Move the outside market, then choose when the oracle updates. Current deviation 0.00%.
Supply does not shrink automatically when reserves are lost. Apply loss, redeem part of the balance, and inspect coverage and exit capacity.
Deposit collateral, then mint USD-LAB. Target, market, and oracle prices are three different states.
- 01
USD-LAB created：target price 1.00 USD, minting must be backed by collateral.
Use the slider to return to an earlier step. Continuing from there replaces the later history with a new sequence.
Expand: how this step works
reserveValue = reserve × oraclePrice
liability = supply × targetPrice
coverage = reserveValue / liability
if coverage < liquidationThreshold:
expose the shortfall
Stablecoin systems often also need reserve disclosure, risk-parameter governance, pause or liquidation paths, and a clear loss-absorber. This lab keeps the state small but makes conservation checks and bad states visible.
Why does existing supply not prove that every holder can exit at $1?
Recap: stability is not one number
A credible stablecoin system should state its target, collateral, issuance ceiling, redemption rule, reserve condition, price input, and loss absorber. Hide any one of them and users may mistake a label for a mechanism.